Learning about money is boring. Board games are fun. Play one and teach your kids a lesson without them noticing.
Maintain a personal budget that helps you save money and avoid debt
Build a personal budget that helps you control overspending that leads to credit card debt.Personal budgeting tends to get a bad rap. In the past, it was a time-consuming hassle that most people would prefer to avoid. However, today’s technology, such as smartphone budgeting apps, make it easy to budget so it can become part of your daily routine. The more you stick to a budget, the easier it is to save money and manage debt. It also helps you avoid issues that lead to financial hardship. The articles in this section are geared towards helping you learn how to build and maintain an effective personal budget. You can find more tips at the bottom of this page.
The Goalsetter app teaches kids how to save and earn money, and can be tied into an adult’s bank account for allowance or gifts. Read our review today.
Wismo, or Where I Spend Money, is a personal expense tracker and budget planner that’s free for iOS and Android. Find out how well it works in our review.
We asked over 50 experts to give us the keys to living a debt-free lifestyle. Start here to learn how to achieve and maintain a debt free life.
If you don’t talk about finances, dark days may be ahead. But don’t worry – we have tips on how to avoid this.
It’s hard to teach financial literacy to your kids when you don’t know much yourself.
Many worry about affording basic costs of living – including healthcare.
You don’t need to max out a credit card or tap into your emergency savings.
They learned from watching their parents’ finances tank during the Great Recession.
Being pennywise and pound foolish will cost you more in the long run.
If debt threatens you, the best thing to do is to stare the beast right in the face — or force yourself to listen to financial podcasts on your commute.
Those little purchases may seem harmless, but they add up to a dangerous amount.
Don’t eat out just because you didn’t plan dinner.
Colleges are like buying real estate property, some will pay out more than others over time.
‘Tis the season to spend and marketers already have you pegged.
These financial bloggers share their secrets that they use themselves.
Udemy helps gift-givers save – and recipients learn.
A plan to save money while still getting everything you need and want.
I asked some of the best personal finance experts. Here’s how they answered.
New technology is giving consumers new ways to pay, but some methods can be bad for your budget. We go through all of the latest payment options that consumers have, to help you find the right one to save.
See how typical budgets for grade school and college students compare – and how you can save.
From insightful to downright greedy, Tinseltown’s finest have thought-provoking opinions on money.
Get feverish about saving money or paying off debt with a savings thermometer.
From flights and hotels to food – save on everything you need to have more for what you want.
From prescription drugs to home ownership, tech startups are trying to make money by saving you money.
Rather than saving energy, daylight saving time prompts us to spend more money.
Did you spend 2017 awake at midnight, worrying about bills? Create a budget and sleep debt-free.
Learn more about why FlexShopper is changing the rent-to-own industry. You shouldn’t have to be penalized by retail stores when trying to re-establish good credit.
And she hopes it will help other women improve their finances.
He was a born saver and hustler — even if it meant cleaning up poop.
She stopped making excuses and started her own financial and personal revival.
They remind the My Family On a Budget writer of his money mistakes.
New York City is expensive but he and his wife make it work.
Listing priorites and values made a vacation of a lifetime happen.
If you think PFM platforms are just for Wall Street big wigs, think again. These days almost any consumer can use a PFM to build a better financial outlook.
We help you understand the four key concerns in effective personal finance and money management that seniors need to know for a comfortable retirement.
When you take individual perspectives and blend them into a single money management strategy, it can be tricky. Here are 4 key questions to ask when budgeting for couples.
New Years’ resolutions usually end in failure. Here’s how to keep yours and become financially free this year.
Debt.com brings you a handy infographic reference guide to how much you should tip service professionals during the holidays.
No matter how old you are or where you are in life, as a woman you need a personalized financial strategy that helps you avoid issues and reach your goals.
Budgeting doesn’t have to be difficult or time consuming – especially if you avoid these budget don’ts so you can focus on what you need to do.
A personal financial management (PFM) platform is a money management tool you can use to make budgeting, saving and debt elimination fast and hassle-free.
From marriage to kids to downsizing in your golden years, we’ll show you what you need to know to make sure your family is financially successful.
If you believe one study, China’s teenagers are financially smarter than our own.
Most Americans have some majorly mistaken assumptions about retirement. How many of these do you fall for?
8 Tips for Effective Budgeting
#1: Find a platform that fits your lifestyle
The biggest roadblock in budgeting is finding a tool that makes it easy to budget. Pen and paper or spreadsheet budgeting are rarely effective because they don’t integrate easily into your daily life. But a smartphone app is easy to check every day.
So, the best budgeting tip we can offer is to find a platform that fits seamlessly with your lifestyle.
- First check with your bank or credit union – you may have a budgeting tool already integrated with your checking account.
- Look in your app store to find free budgeting apps
- If you’re concerned about security, you can opt for desktop software, although this option is rarely free
#2: Recognize that budgets are not set in stone
One of the biggest mistakes that people make when they budget is that they set up a budget, then leave it be. Budgets are not set in stone! They are constantly changing, based on your income, needs and wants. Recognizing this means that you give yourself more flexibility. You set targets that you aim for, instead of defining concrete numbers that you can’t deviate from.
Always remember, a budget is really just a recommended spending guide. It helps you stay on track. But if you color outside your budget lines every once in a while, that’s okay!
#3: Set targets to control your spending
Whether you use an app with built-in categories or you make a budget from scratch, always make sure to set spending targets. These help you keep flexible and discretionary expenses under control so you can avoid overspending.
Flexible expenses are necessary expenses that don’t have a set cost (as opposed to fixed expenses, that have set costs). Discretionary expenses are all your wants, whether they have fixed or variable costs.
In both cases, you should set spending limits for each category of expense that you have. For instance, you set a food budget of $100 per week or $400 per month.
#4: Use alerts to your advantage
Most budgeting tools that are popular today offer alerts. They track spending and alert you whenever you approach a spending target. This helps you keep your spending under control. The alerts are usually sent via email, text message or through on-screen notifications if you use an app.
Using these alerts helps you stay on target without depending on you to check the app every day. Instead, your budgeting tool will tell you when it’s time to check in and adjust your spending.
#5: Pad your budget with free cash flow
Your budget should always balance your expenses versus your income. But that doesn’t mean that every dollar should be accounted for as an expense. If you spend exactly what you earn, you haven’t built an effective budget. Instead, you’ve built a strategy that ensures you’re always going to live paycheck to paycheck.
Instead of budgeting down to your last dollar, you need to leave yourself some breathing room. Ideally, you should only spend about 75% of what you bring in each month. That extra 25% is called “free cash flow.” This is basically money that you use to cover those unexpected expenses that inevitably come up each month.
#6: Savings is not free cash flow
Another big mistake that people make when budgeting is treating free cash flow as savings. You basically decide to save whatever you have leftover at the end of each month. This is a sure way to ensure you never save anything.
Instead, savings should be treated like a fixed expense. You decide how much you can afford to save each month – ideally, between five and ten percent of your income. Then you set this as a fixed expense in your budget. It’s like a bill that you pay yourself every month.
This keeps saving separate from free cash flow. You have money to cover all those unexpected expenses, but you also save consistently.
#7: Adjust your budget at least every six months
As we pointed out above, your budget should not be set in stone. Anytime you have a change in income or a new recurring expense, you need to revisit your budget.
But in addition, you also should make seasonal budget adjustments. Expenses from summer to winter vary widely. For instance, your electric bill could vary by up to $100 or more, depending on where you live. You can’t just decide to use less energy and leave your family freezing in the winter, so you need to adjust the target.
This also allows you to build in money for seasonal costs, such as a back to school budget in the summer and holiday budget in the winter. The more accurately you track these seasonal cost, the easier it will be to control your spending.
#8: Make sure to keep needs and wants separate
With budgeting apps, this usually involves customizing your categories. Most budgeting tools categorize transactions automatically. But the categories may blend needs and wants that are better kept separate.
For example, most applications auto-categorize food purchases. So, all your grocery store and restaurant purchases are lumped in together. But that isn’t a fully effective way of budgeting because it blends a need and want together.
Groceries are a need because you need food to survive. By contrast, eating out is a luxury – it costs more and should be curtailed when you’re worried about overspending. With that in mind, you should customize your app to split food into two categories: groceries and dining out.
This allows you to have one food budget that necessary (and fairly constant) and another for treating yourself and family. This also makes it easier to cut back when things get tight.